By Jacob Passy
Airlines are eager to sell you frequent-flier points and miles. Their latest sales pitch: buying airline miles on a monthly basis. Paying cash for miles doesn't guarantee a bargain, so be sure to do your homework before taking up any offers.
Even as shoppers say they are growing tired of seemingly endless subscriptions, more airlines are betting that travelers want to guarantee access to a steady stream of loyalty points to subsidize lavish trips. Air France-KLM's loyalty program Flying Blue is the latest to offer such a subscription service. United Airlines and Southwest Airlines launched similar services in 2021.
Between these services and the more typical offers to buy miles and points, it's easy to feel pressure to scoop up what seems like a deal.
But buying miles often doesn't mean spending less on flights. And money used on points might be better put toward an investment that earns interest.
To buy or not to buy
At virtually any point, "there are good odds that someone will be having a sale on points," says Tiffany Funk, co-founder of point.me, an award-travel search platform.
Some airlines, including Hawaiian and JetBlue, have advertised bonuses upward of 100% for these transactions. Southwest has offered discounts on buying points with bonuses ranging from 40% to 50% on seven occasions in 2024, Funk says.
Flying Blue rolled out its subscription plan, called Subscribe to Miles, last week, following a soft launch. For a monthly fee ranging from roughly $30 to $200 a month, people who sign up can receive a monthly allotment of up to 17,000 frequent-flier miles. Subscribers can cancel at any time.
Buying miles or points to use at a later date comes with risks. The value of those points can decrease over time, or the points can expire.
"As a rule, I think it generally only makes sense when you need to top off an account in order to achieve a redemption," Funk says.
You can also find deals if you check your preferred carriers regularly and do a little math. Check how much an award flight would cost in points versus cash. Then calculate how much it would cost to purchase the necessary number of points or miles.
"You want a higher cents-per-point when you're redeeming, and a lower cents-per-mile when you're buying," says Tim Qin, co-founder and chief executive of Roame.Travel, an award-travel search website.
A test case
Take an Air France round-trip flight between Denver and Paris.
A promotional reward fare could land a flier an economy ticket for 30,000 Flying Blue miles, based on a Monday search. Someone in the second-highest tier of Flying Blue's subscription plan could acquire that many miles in three months, spending a bit over $400 (not including taxes and fees). The same flights could cost more than $1,400 for the most bare-bones fare in cash.
However, the same trip the week of Christmas cost over 110,000 miles, plus taxes and fees, as of Monday. Booking a bare-bones flight using cash would cost just over $1,600. That same subscriber would need to spend nearly a year accruing the necessary miles -- and could end up paying more than the original fare after accounting for taxes and fees.
Air France's pricing was designed to be more favorable than if a traveler were to buy miles from Flying Blue on a one-off basis, says Peter Schinasi, Flying Blue's loyalty director for North America.
Buying 2,000 miles a month costs $34, or 1.7 cents per mile. That same amount outside of the subscription costs nearly twice as much. The more expensive tiers of the subscription service offer better value, up to around 1.3 cents per mile.
Schinasi says Flying Blue has found that the option appeals to a range of travelers, not just those obsessed with points. A subscription service like this could allow someone who isn't a frequent traveler to build up a war chest of miles to enable them to take advantage of deals on award tickets, he says.
Airlines feel pressure to allow travelers to earn miles through methods other than booking flights as frequent-flier programs have become a larger contributor to their bottom lines.
"The majority of miles these days are awarded through nonflying means," Funk says.
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Write to Jacob Passy at jacob.passy@wsj.com
(END) Dow Jones Newswires
November 18, 2024 21:00 ET (02:00 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
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